Venture Capital 2025 Comparisons

The Norwegian venture capital market has demonstrated a robust level of activity over the past 12 months, reflecting a growing interest in innovative start-ups and emerging technologies. Nevertheless, the landscape has been characterised by a notable absence of very large deals that typically capture headlines internationally. Notable venture capital-related transactions during the past 12 months include the following:

• eSmart Systems raised NOK 350 million from, inter alia, Tilt Capital and Quanta Service;
• 7Analytics raised NOK46.5 million from Scale Capital;
• Sport AI raised NOK20 million from Skyfall Ventures and MP Pensjon;
• Heimdal Power raised NOK260 million from inter alia Orlen, EnvisionTech (formerly NRP Zero), Investinor AS, Eviny Ventures AS, Sarsia Venture Management AS, Hafslund Invest, and Lyse Vekst As;
• Maritime Robotics raised NOK130 million from Nysnø Klimainvesteringer, Umoe and Holta Invest AS;
• Remora Robotics raised NOK80 million from Frøy Kapital AS, Grieg Kapital AS and Momentum Partners AS;
• Spoor raised NOK43 million from, inter alia, Superorganism, Futurum Ventures, Ørsted and Nysnø Klimainvesteringer;
• Glint Solar raised NOK87 million from Smedvig Ventures, Futurum Ventures, Momentum Partners AS, and Antler; and
• Reduzer AS raised NOK20 million from Momentum, Futurum Ventures and Construct Ventures.

In 2022 and 2023, the Norwegian venture capital market was impacted by global economic challenges such as geopolitical uncertainty, inflation, and rising interest rates, leading to a decrease in fundraising and more stringent investment conditions. The easy access to capital seen during the pandemic shifted to a landscape of lower valuations and more demanding investors.

While high interest rates and the depreciation of the Norwegian krone moderated Norwegian venture capital activity in 2023, it also made Norwegian investments attractive to foreign investors. With the interest rates stabilising in 2024 and the Norwegian krone remaining weak, international venture capital funds have become increasingly active in the Norwegian market during the past year. Norwegian venture capital funds continue to be active ‒ although reporting a tougher climate for fund raising and less “dry powder” for the years to come (NOK18 billion compared to NOK29 billion in 2018 according to the Norwegian Venture Capital Association).

For many start-up and growth companies, 2024 has been a year of “make it or break it”, as venture capital funds are increasingly focused on the high-quality companies and show significantly less interest in participating in down rounds for early-phase companies that are not showing the same traction.

Private equity funds are still increasingly participating in growth equity, which is the space between venture capital and private equity, focusing on minority investments in scaling companies. This shift has led to more competitive negotiations for companies, as private equity funds typically require a solid business plan and clear exit strategies, which may not always align with the interests of other shareholders. The entry of private equity funds into the market has intensified competition among investors for a limited number of established and upscaling companies. This trend is seen as positive for companies in need of financing during their critical growth phases. According to the Norwegian Venture Capital Association Norwegian, private equity funds have also reported to have NOK105 billion in dry powder in late 2024, which is up from the NOK89 billion reported the year before.

Please refer to 3.2 Process for the impact on deal terms.

According to the Norwegian Venture Capital Association, the transportation sector, ICT (Information and Communication Technology) and cleantech were the dominant industries in terms of amounts invested in the venture and seed phase in 2023. The writers have observed that these sectors have continued to dominate the Norwegian venture capital landscape in 2024, but that there has been a notable increase in interest in venture capital companies operating in the AI space, driven by emerging mega trends.

Domestic venture funds are typically structured as tax-opaque limited liability companies (aksjeselskap) or as tax-transparent partnerships (indre selskap).

The investment manager acts as the alternative investment fund manager in compliance with the Norwegian Act on the Management of Alternative Investment Funds (the “AIFM Act”), implementing the EU’s Alternative Investment Fund Managers Directive (AIFMD).

When it comes to foreign structures, it has traditionally been common to choose offshore jurisdictions such as Guernsey, Jersey, and the Cayman Islands. However, there has been an industry shift towards onshore EU/European Economic Area (EEA) jurisdictions such as Luxembourg.

In Norway, tax-opaque limited liability and tax-transparent partnership structures – despite a few legal distinctions ‒ largely conform with regard to governance and decision-making processes. Fund operations are principally, within the bounds of mandatory law, delegated to the investment manager and regulated by either a shareholders’ agreement and investment management agreement or a limited partnership agreement. The terms of fund agreements generally adhere to European best practices for venture capital funds, including Invest Europe and the Institutional Limited Partners Association’s principles and model limited partnership agreements.

Equity incentivisation of the investment team is a common feature of venture capital funds in Norway and plays an important role in aligning the interests of the investment team with those of the investors. Typically, the investment team – via a distinct limited liability company ‒ will commit an amount equal to 1‒2% of the total commitments to the fund and the fund’s equity is usually divided into preference shares and ordinary shares. The preference shares generally have a priority to a repayment of paid-in capital plus a preferred return.

With regard to the carried interest model, most Norwegian venture funds opt for a European waterfall (whole-of-fund model), as opposed to an American waterfall (deal-by-deal model). Norwegian venture funds typically incorporate a claw-back provision in the fund documents to facilitate the repayment of any excess carried interest. Furthermore, the investment team will generally agree to reduce its rights to any accrued or future carried interest if the investment manager is removed for cause. Linear vesting of carried interest may also be included in the fund documents.

Generally, domestic venture funds are classified as alternative investment funds (AIFs) pursuant to the AIFM Act. The Norwegian definition of an AIF implements the definition in the EU AIFMD, meaning that AIFs are collective investment undertakings that are not Undertakings for Collective Investment in Transferable Securities (UCITS) and which raise capital from a number of investors for the purpose of investing the fund’s capital pursuant to a defined investment strategy for the benefit of said investors. AIFs must be managed by an external alternative investment fund manager (AIFM) or be managed internally, in practice by its board. The AIFM Act applies to all AIFMs. In the case of internally managed AIFs, the fund itself is considered the AIFM.

All AIFMs must notify the Norwegian Financial Supervisory Authority (NFSA), also known as Finanstilsynet, before marketing an AIF to professional investors, and obtain a separate marketing authorisation before marketing an AIF to non-professional investors. As a principal rule, only AIFMs with authorisation ‒ as opposed to AIFMs that are only registered (commonly referred to as “sub-threshold” AIFMs) ‒ may market AIFs to non-professional investors.

An exemption to this main rule applies to AIFMs of European venture capital (“EuVECA”) funds, which is increasingly common in the Norwegian market. This is an EU/EEA-wide label available to both authorised and registered AIFMs that manage AIFs that are qualifying venture capital funds as defined in the EU Regulation on European venture capital funds. Obtaining registration as an EuVECA manager, and the accompanying right to use the designation “EuVECA” in the marketing of qualifying funds, allow for the marketing of the fund to non-professional investors meeting certain criteria and the passporting of the marketing authorisation across the EU/EEA.

The level of due diligence conducted by venture capital fund investors varies a lot, mostly depending on the stage of the target company. In early-stage venture capital investments (seed to Series A/B), the venture capital funds have a strong focus on the commercial/financial due diligence, while the legal due diligence is normally limited to the following topics:

• cap table and dilutive instruments;
• employment agreement for founders and key employees, including incentive programmes;
• ownership to technology;
• material agreements; and
• disputes.

For investments in later-stage companies (Series B/C and later) and in growth companies, the due diligence is normally more detailed and generally in line with what one would typically see in a private equity buyout due diligence.

In 2022‒23, raising financing for growth companies became increasingly difficult. In addition to bringing the valuation down, the anchor investors requested downside protection, while also wanting a larger share of the upside than what their stake would imply if things go well. These factors resulted in more extensive negotiations, complex structures and drafting rounds, and – for many Norwegian VC companies ‒ this has been the case for financing rounds in 2024 as well.

The increased venture capital deal activity in 2024 and so far in 2025 has resulted in less complexity and more efficient processes. Existing lead investors are following up their investment with their pro rata share in the new financing rounds, meaning that the shareholders’ agreement to a lesser extent is renegotiated, but often is limited to adding an additional layer of liquidation preference.

New investors normally have separate counsel. Among existing investors and founders, whether they have joint or separate counsel varies, depending on how aligned theirs interests are in the new round.

Investors normally invest in start-ups and growth companies by acquiring preference shares, as opposed to common shares. The Norwegian Companies Act allows for separate share classes with different rights if regulated in the company’s articles of association. Preference shares generally have rights that are more advantageous than common shares, such as liquidation, anti-dilution and distribution preferences. Venture capitalists and larger investors will accordingly typically demand preference shares, but it is also not in any way uncommon that investments take place in common shares.

In Norway, a venture capital or growth investment is normally done on the basis of:

• a term sheet (optional);
• an investment agreement; and
• a shareholders’ agreement.

In order to complete the financing round, a number of corporate documents are also required:

• minutes from meeting of the board of directors in which the share capital increase is proposed to the general meeting;
• notice of and minutes from a general meeting in which the share capital increase is resolved; and
• updated articles of association.

It can be noted that the articles of association in Norwegian companies are normally kept very short, with the majority of regulations ‒ except for share capital, number of shares and any share classes with related rights (eg, liquidation and distribution preferences and voting rights) ‒ being set forth in the shareholders’ agreement by and between the company, the founders, investors and any other existing shareholders. There is no established standard for investment documents or shareholders’ agreements. However, major early-stage investors and venture capitalists are generally keenly aware of market practice, which ensures fairly similar terms in various investment agreements.

Certain incubators provide templates and resources of varying quality that are often used by start-ups – notably, shareholders’ agreements and SLIP agreements (see below) ‒ ensuring similar documentation in many venture deals. Some major early-stage investors also use their own standardised templates for investment agreements, as well as shareholders’ agreements for their portfolio companies.

In very early rounds, the investment is often done on the basis of a so-called SLIP (Start-ups Lead Investment Paper, developed by incubator StartupLab), similar to the SAFE instrument that is commonly used in the USA. The concept of the SLIP is that the investor invests in the company against a right to subscribe for shares at minimum (nominal) cost in a future share capital increase. The right to subscribe for shares is normally triggered by the following circumstances:

• an equity financing round of a predetermined amount;
• a corporate transaction of a predetermined size (typically an acquisition or a merger of the company); or
• at the investor’s discretion, if so agreed.

The key financial terms are typically a discount and a valuation cap, meaning the highest applicable amount used to calculate the number of shares allotted to the investor. Entering into and executing SLIP agreements is generally less time-consuming than a priced round. Another key benefit is that the company is not valued at a price per share upon execution. This avoids the issue of correct valuation of early-stage companies and allows for incentivising core teams with shares acquired at low value. Further, the SLIP agreement is not a loan, so no interest is paid on the initial amount and there is no maturity date at which the investor can claim repayment.

Venture capital investors will often require strong downside protection mechanisms, where the following concepts are most common.

• Liquidation preference/exit preference – mechanisms ensuring that the venture capital investor at least gets their investment amount back (either with or without a multiple) before any of the common shares receive any exit or liquidation proceeds are common. It varies as to whether the venture capital investor also has the right to participate pro rata in any remaining proceeds along with the common shareholders (a so-called participating liquidation preference).
• Further, anti-dilution rights are commonly seen, in the event that the company issues new shares at a lower price than the venture capital investors paid. The anti-dilution is facilitated by way of the company issuing a number of additional shares (at nominal value) that are necessary to ensure that the average subscription price of the initial invested shares and the new shares are equal to subscription price in the down round. The anti-dilution mechanism can take into account the number of shares issued in the down round, meaning that a small down round would trigger the issuance of fewer anti-dilution shares than a large down-round (a so-called volume weighted average anti-dilution right) or be a so-called full ratchet anti-dilution right where the size of the down round is disregarded.
• Pre-emption rights and subscription rights – pursuant to the Norwegian Companies Act, existing shareholders have a pre-emptive right to subscribe for new shares issued by the company. The general meeting may, however, through a qualified majority of two-thirds of the votes cast and share capital present at the general meeting, decide to deviate from the pre-emptive rights of existing shareholders. The right for existing shareholders to subscribe for new shares is therefore normally also regulated in the shareholders’ agreement.

In addition to exercising influence through their ownership rights (voting at the general meeting), a venture capital investor would normally secure the following rights to influence the management and the affairs of the venture in a shareholders’ agreement.

• Board representation – investors may have the right to appoint one or more representatives to the company’s board of directors. This allows them to have a say in strategic decision-making and key governance matters.
• Consent rights (reserved matters) – investors may have the right to provide consent or approval for certain significant decisions, such as any changes to the articles of association, the issuance of new shares or other financial instruments, changes to the capital structure, changes to the business activities, undertaking of debt, the entering into of mergers and demergers, agreements relating to acquisitions and disposals, payment of dividends, the entering into large contracts, any substantial investments, or the hiring of key executives.
• Information rights – investors usually have the right to access certain information about the company’s operations, financials, and performance.

The type of representations and warranties commonly observed in a financing round in a Norwegian start-up or growth company relate to:

• legal status and corporate power;
• no conflict;
• the issued shares/equity instruments;
• financial statements and sometimes also management accounts;
• position since the accounts date;
• real property and other assets;
• IP rights and IT;
• the General Data Protection Regulation (GDPR);
• material agreements;
• related party transactions;
• employees and pension;
• insurance;
• tax;
• compliance;
• no insolvency;
• litigation; and
• disclosed information.

Normally, the more mature the company is, the more extensive the representations and warranties. It can be noted that, similarly as with M&A transactions, the representation and warranty catalogue is somewhat less extensive/comprehensive than typically is seen in, for instance, the USA.

In terms of recourse in the event of breaches of any representation or warranty, a key point to note is that a Norwegian limited company ‒ as a matter of law – may not indemnify investors in connection with a share capital increase. Any loss for breach of warranties or otherwise therefore needs to be compensated at shareholder level. Normally, this is done through the issuance of compensation shares in the event of a loss, as existing shareholders would not normally be willing to offer any cash compensation to new investors in the event of a breach of warranties by the company. In some cases, the venture capital investor will need to be issued a number of warrants equal to the maximum number of compensation shares, as the issuance of new shares will require the resolution by the general meeting (with a two-thirds majority requirement). In most cases, however, the shareholders will ‒ in the shareholders’ agreement ‒ undertake to vote for the necessary resolutions in order to issue the compensation shares. A loss can be defined in different ways, but a common approach is to look at the value reduction of all the shares in the company and multiply it by the investor’s ownership share.

The Norwegian government offers several programmes to incentivise equity financings in growth companies.

• Innovation Norway offers certain grants, start-up loans, innovation loans and guarantees to support Norwegian growth companies. The government has also backed several seed funds through Innovation Norway aimed at providing financing to growth companies.
• The Research Council of Norway provides a tax deduction scheme (SkatteFUNN), which reduces the costs related to research and development.
• Export Finance Norway provides governmental loans and guarantees for investments in Norway that contribute to exports or to other transactions that generate value within Norway.

Additionally, Norway has signed a contribution agreement with InvestEU for green, digital, small and medium-sized companies financing, which covers financial products and projects under the three InvestEU policy windows:

• sustainable infrastructure;
• research, innovation and digitalisation; and
• small and medium-sized businesses.

Moreover, the Norwegian government invests in numerous growth companies and venture funds, directly or indirectly, in Norway and internationally, through the state-owned investment companies Investinor, Argentum, Nysnø and Norfund as well as through regionally based seed funds.

The Norwegian tax treatment of equity investments in a growth/start-up company does not differ from the general tax treatment of other non-listed companies in Norway. In principle, ordinary income of the fund is taxable for the fund at a rate of 22%.

Norwegian Portfolio Companies

As Norwegian growth/start-up companies are typically established as limited liability companies, equity investments in such companies generally qualify under the Norwegian participation exemption. As a result, capital gains on such shares are tax-exempt. Dividends distributed from such companies are taxed at an effective rate of 0.66%.

Portfolio Companies Within the EU/EEA

Equity investments in growth/start-up companies within the EU/EEA are covered by the Norwegian participation exemption, provided that:

• the EU/EEA entity is a qualifying object under the Norwegian participation (ie, an entity that generally corresponds to a Norwegian limited liability company);
• the respective EU/EEA jurisdiction is not considered a low-tax jurisdiction; and/or
• the EU/EEA entity is genuinely established and carries on genuine economic activities within the relevant EU/EEA jurisdiction.

Portfolio Companies Outside the EU/EEA

Equity investments in growth/start-up companies outside the EU/EEA are covered by the Norwegian participation exemption, provided that:

• the foreign entity is a qualifying object under the Norwegian participation exemption;
• the fund has consistently owned at least 10% of the share capital and controlled at least 10% of the voting rights at the general meeting for a period of two years; and
• the foreign entity is not resident in a low-tax jurisdiction.

The Norwegian government has implemented several material initiatives to increase the level of equity financing of Norwegian growth companies (see 4.1 Subsidy Programmes for a high-level overview).

The founders’/key employees’ long-term commitment is normally procured by the following.

• Vesting agreements – particularly in early-stage venture capital, where the founders are the majority owners of the company, it quite common that venture capital investors require the founders’ shares to be subject to a vesting schedule. Under a typical vesting schedule, the founder will need to sell shares back to the company or other shareholders if they leave the company prior to full vesting. The terms of the sale (including the price) will often depend on the circumstances around a founder leaving (ie, typically a “good leaver/bad leaver” mechanism). The purpose of the vesting schedule is not only to secure long-term commitment but also to ensure that there is no “dead equity” in the company (equity held by persons no longer affiliated with the company), which could make subsequent financing rounds more difficult.
• Shareholders’ agreements – shareholders’ agreements can include provisions that require founders and key employees to commit to the company for a certain period through, for instance, a lock-up period for their shares.
• Employee stock ownership plans (ESOPs) – venture capital companies often have an ESOPs in place, allowing founders and key employees to increase their ownership in the company. Such programmes can be option programmes or share purchase programmes. Vesting of options is often time-based, but can also be linked to the achievement of agreed key performance indicators.
• Private equity-style management incentive programmes (MIPs) – some venture capital investors prefer a private equity-style MIP for the companies in which they invest. Such programmes are mostly appropriate for growth companies and not early-stage companies.

The instruments/securities used for the purpose of incentivising founders/employees range from co-investments with or without vesting schedules and share option programmes to more complex structures providing substantial gearing to management’s investment and a different return profile, with the latter mostly used in growth companies.

Share options are less tax-efficient than other forms of equity-based incentivisation and will normally be most relevant for management incentives in publicly listed companies and early phase VCs.

Reference is made to 5.1 General regarding terms relating to such instruments.

Management of the portfolio companies is generally expected to co-invest alongside the fund. The extent of management’s investment typically varies based on their seniority and existing equity holdings that can be rolled. Investments by management are usually structured through a preference and ordinary shares structure. At the fund level, the investment team’s investments are typically equity-based and subject to certain limitations as outlined in the AIFM Act (see 2.2 Fund Economics).

Capital gains and dividends for management are principally fully taxable as capital income at an effective rate of 37.84% minus a risk-free return. However, if management invests through a personal holding vehicle, capital gains and dividends are principally exempt (0.66% tax on dividends). In comparison, employment income is taxed at a marginal rate of 47.4% and subject to national insurance contributions of 14.1%.

Normally, the key terms and structure (including size) of an employee incentive programme is one of the key terms that are negotiated with venture capital investors in a financing round. Such key terms are then set out in the investment agreement and/or shareholders’ agreement and, in most cases, left to the (new) board of directors to implement following completion of the financing round. Rarely is the employee incentive programme observed as having any impact on the venture capital investment process as such.

In Norway, the shareholders’ rights in relation to a sale, IPO or other liquidity event, as well as transfer restrictions and exit triggers, are typically governed by the company’s shareholders’ agreement. The exit-related provisions typically set out the exit triggers, how the exit process shall be completed, and how the proceeds shall be distributed among the shareholders. Exit triggers are events or conditions that trigger a potential sale or IPO. Common exit triggers include reaching a certain valuation, achieving specific financial milestones, or a specified time period ‒ the latter of which have become more common in order to give the company time to focus on growth and profitability. The definition of exit triggers can vary depending on the specific circumstances and negotiations between shareholders.

In terms of transfer restrictions, the provisions commonly seen in venture capital companies are as follows.

• Lock-up – lock-up provisions ensure that shareholders (or certain shareholders) do not sell shares for a certain period of time.
• Right of first refusal (ROFR)/right of first offer (ROFO) – ROFR provisions give existing shareholders the right to purchase shares that another shareholder intends to sell before those shares can be sold to a third party. If a shareholder receives an offer from a third party to purchase their shares, they must first offer those shares to the existing shareholders at the same price and terms. The existing shareholders then have the option to accept or decline the offer. If they decline, the shareholder is free to sell the shares to the third party on the same terms. Generally, it can be difficult to achieve an offer from a third party on a stake that is subject to a ROFR, so investors often prefer a ROFO instead, where the shareholder wishing to sell would need to offer the shares to other existing shareholders before the shares can be offered to a third party. If the selling shareholder rejects an offer from other existing shareholders, it can only sell to a third party at a higher price.
• Drag-along rights – drag-along rights allow a majority shareholder or a group of shareholders to force minority shareholders to sell their shares in the event of a sale or liquidity event (typically, an IPO). This provision ensures that all shareholders can participate in the transaction and prevents minority shareholders from blocking a potential exit.
• Tag-along rights – tag-along rights protect minority shareholders by allowing them to join in a sale or liquidity event initiated by a majority shareholder. This provision ensures that minority shareholders have the opportunity to sell their shares on the same terms as the majority shareholders.

Although IPOs can be a viable exit strategy for some start-ups, they are not as common in Norway as they are in other countries such as the USA. The prevalence of an IPO exit for start-ups in Norway has varied throughout the years, based on the general sentiment and market conditions. In 2020–22, many early-phase and growth companies were able to obtain high valuations simply based on expected future earnings, and many early-phase and growth companies achieved successful IPO exits around that time due to high investor demand. A record high number of early-phase companies were listed on Oslo Børs’ junior market, Euronext Growth Oslo. Euronext Growth Oslo is the most appropriate marketplace for less mature companies, with less-strict listing requirements compared to the Oslo Børs’ main list. Many early-phase and growth companies that listed in 2020–22 structured their offering by way of a capital raise through a private placement directed to a handful of institutional investors and high net worth individuals, followed by a listing. Some of the more mature growth companies were listed on Oslo Børs’ main list, following a more classic public offering on the basis of an offering prospectus.

Since 2022, very few early-phase and growth companies have sought an IPO exit, owing to low investor demand. However, many early-phase and growth companies have been able to achieve a decent valuation and secure investors in a private setting. A number of the growth companies that were listed in the period 2020–22 have since been taken private to allow the companies to focus on long-term growth and profitability and relieve them of the quarter-by-quarter scrutiny of the public markets.

The need for secondary market trading prior to an IPO in the Norwegian market is rarely observed. There are some companies that are traded “off the counter” through the broker desk in Norwegian investment banks. However, the volumes traded are normally limited, which means that it rarely represents an exit opportunity.

When a Norwegian company is offering equity securities, several legal provisions may come into play. The relevant laws and regulations include, but are not limited to, the following.

• The Norwegian Private Limited Liability Companies Act – this act governs, inter alia, the issuance of new shares and shareholders’ preferential rights. The shareholders’ agreement supplements the rules of the Norwegian Private Limited Liability Companies Act.
• The Norwegian Securities Trading Act and the EU Prospectus Regulation – these may come into play in large equity offerings. However, it is very rare that an equity offering in an early-stage or growth company is structured in a way that would trigger the obligation to publish a prospectus. There is, for instance, an exemption from the obligation to publish a prospectus if the offer is made to fewer than 150 persons, and this will normally be the case.

A foreign investor that invests in a Norwegian company may be subject to a foreign direct investment filing obligation in accordance with the Norwegian Act on National Security (the “Security Act”). The application of the rules on ownership control, contained in Chapter 10 of the Security Act, presupposes that the undertaking has been brought within the scope of the Security Act by way of an administrative decision pursuant to Section 1(3).

A list of the companies subject to the Security Act has not been published and will not likely become available to the public for national security reasons.

When a company has been brought within the scope of application of the Security Act, the acquirer of a “qualified ownership interest” in that company must notify the acquisition to the relevant authority. As of now, a “qualified ownership interest” entails obtaining:

• one-third of the company’s stock capital, interests or votes;
• a right to become the owner of one-third of the stock capital or interests; or
• significant influence over the company by other means.

Legislative changes in what is defined as “qualified ownership interest” have been adopted but not yet entered into force (expected during 2024). These amendments entail lowering the threshold for triggering events (ie, definition of “qualified ownership interest”) with recurring filing obligations at several levels for the acquisition of direct or indirect holdings of 10%, or an increase to 20%, one-third, 50%,two-thirds or 90% of the share capital, participating interests or votes in the company.

If the authorities conclude that the acquisition may cause a not insignificant risk for national security interests, the authorities may block the transaction or, if the acquisition is already closed, order the acquisition to be reversed.

Outside the scope of application of Chapter 10, Section 2(5) of the Security Act contains a general intervention clause that empowers the authorities to intervene against any planned or ongoing activities (including transactions) that may cause a “not insignificant risk” to national security. The government has once used this provision to block a transaction where the target was not brought within the scope of the Security Act.